May 09, 2024
First-quarter revenue at Kelly Services (NASDAQ: KELYA, KELYB) fell 17.6% year over year to approximately $1.05 billion. The decrease is primarily due to the sale of its European operations earlier this year. Revenue fell 2.6% on an organic basis.
“In the first quarter, we continued making progress on our journey to accelerate profitable growth notwithstanding continued macroeconomic uncertainty and industry headwinds,” President and CEO Peter Quigley said in a press release.
Kelly Services has recently undergone several changes.
The Troy, Michigan-based firm sold its European operations to Italy’s GI Group in a deal that closed Jan. 2. The transaction unlocked more than $100 million in capital, the company said.
Then Kelly announced this month it’s acquiring Motion Recruitment Partners for $425 million, Kelly’s largest acquisition ever. The MRP deal will add to Kelly’s staffing and solutions business in North America and its RPO business globally. Motion Recruitment includes Sevenstep among its other brands.
“When completed in the second quarter, this acquisition will strengthen Kelly’s scale and capabilities and meaningfully increase market share across several key areas, which in turn creates exciting opportunities for future revenue growth and additional EBITDA margin expansion,” Quigley said.
Kelly also announced that it is partnering with Upwork to enable KellyOCG clients to source talent through the Upwork platform, one of the first times a major talent platform has partnered with an MSP.
US revenue
Turning back to the first quarter, Kelly reported US revenue fell 2.7% year over year, though Canadian revenue rose 1.3%. Education staffing continued to be a bright spot with revenue up 16.2%.
In other data:
- Perm placement revenue at Kelly fell 54.4% year over year on a constant currency basis to $8.0 million.
- Gross margin narrowed, though net earnings rose 135.7%.
- The first quarter includes $6.6 million in restructuring charges.
Click to enlarge.
Guidance
Kelly forecast second-quarter revenue will be up 1% to 2% year over year.
Share price
Shares in KELYA were down 5.61% to $22.19 as of 12:09 p.m. Eastern time today. They were 12.18% below their 52-week high.